Cryptocurrency is a digital currency designed to work as a medium of exchange. Transaction in cryptocurrency is processed on the blockchain. It is not under the control of the government, bank or any other middleman.
Types of cryptocurrency
There are three main types of cryptocurrency called bitcoin, altcoin, and token.
Bitcoin is the decentralized digital currency, commonly called as a cryptocurrency. Bitcoin does not depend upon the government or third party, the transaction takes place directly between users, i.e., peer to peer transaction. Bitcoin introduced the technology called blockchain technology by which buying and selling of the product take place directly.
Pros of bitcoin
- i) There are only 17 million bitcoins are present and the remaining 4 million bitcoins have to be mined. This made a great demand among the people and therefore the price of the bitcoin increased.
- ii) Bitcoin is the most popular one. It is easy to change bitcoin into The trading of bitcoin on the internet and it is called an automated trading robot. Comparing to the other cryptocurrency bitcoin is more liquidity.
iii) Most of the online sellers accept the only bitcoin than the other currencies.
After bitcoins were introduced more than thousands of altcoins are launched. some of them are as follows
- a) Ethereum
It is the platform where the people build the dapps, tokens and the smart contracts. Ethereum is encrypted by using the ether. Transaction of ethereum takes place within a fraction of seconds.
Ripple is a blockchain which is mainly used by the banks as it makes the transaction faster. It is also known as bankers coin. Even government and banks are partnered with the ripple.
Part of the bitcoin is called litecoin. It is the first cryptocurrency to use the lightning network and therefore the transaction takes place faster. It is cheap also.
In this cryptocurrency, all the data such as sender, receiver and the amount of transaction is encrypted. There is no tracing of data in monero and it is highly safe and secure.
It differs from the other two cryptocurrencies. The token is completely unique and it does not have block chains. The token is used upon the decentralized applications, uses a smart contract. Discounted fees and voting fees are the advantages of using token.
Now we are known about the different types of cryptocurrency and their advantages.